In this episode Kate Bohm gives us a lesson in tax fundamentals. From why we pay tax, to how to reduce your tax bill, and tax benefits for families, she answers all the common tax questions. Nobody enthusiastically pays tax, but it is important to make sure you are fully compliant.
We discuss the two basic forms of income tax: PAYE and provisional tax. You may pay both, for example if you have a job where PAYE is deducted automatically, as well as income from a side hustle, where you pay provisional tax.
If you have investments, you pay tax on interest income, dividends and capital gains tax. It is a common misnomer that you are liable for capital gains tax on the annual growth of your assets, but Kate explains that you only pay Capital Gains Tax when you sell the asset. There is an exempt amount for both interest income and capital gains tax, and the calculations can get complicated. So, as always, it is really important to get help with your specific set of circumstances.
We also discuss circumstances that allow you to claim a tax rebate against a home office if you work from home, as well as tax incentives for individual or household savings such as pension or retirement annuity deductions and Tax Free Savings Accounts.
Disclaimer: Old Mutual Life Assurance Company (South Africa) Limited is a Licensed Financial Service Provider. This material is not intended as and does not constitute financial advice or any other advice and is neither exhaustive nor prescriptive. It does not take into account your personal financial circumstances. Your financial adviser will assess your financial situation and needs and assist you to draw up a plan to help you achieve your financial goals. The views expressed by the contributor are his or her own (as an independently registered financial services provider, financial adviser or other independent capacity), and not necessarily endorsed by Old Mutual (as a separate financial services provider).
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